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PostPosted: Tue Sep 24, 2019 7:35 pm 
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Wanna wrote:
for sale at £850,000


Wanna should have wrote:
for sale at £85,000


Fixed that for you - and by the sounds of it that's maybe being generous :shock:

Seriously, though, lots of different ways to value a business, and the suggestions here probably point to the complexity of it all, even in quite a straightforward business.

Possibly some multiple of profit, though. Eg five times annual profit, but the multiple will depend on factors like perceived risk. If Uber knocking on door, for example, multiple would be lower due to competitive threat.

Then there's the wider regulatory environment, such as the threat regarding the employment status of drivers, which Uber is finding out to its cost. That hasn't really affected the more traditional trade at this time, but who knows what the future holds.

And for small businesses that kind of valuation will depend on effort you need to expend on it. You would need more of a return if you're going to have to devote 80 hours per week to the business, as opposed to an arms-length investment where you'd just sit back and watch the money roll in.

Then there's the value of any (tangible*) assets, vehicles most obviously. If they're on their last legs (as you seem to suggest), then obviously they'd be of negligible value as regards a reasonable price for the business.

So the bottom line is (see what I did there 8) ) that it's basically a how long is a piece of string-style of question - who knows?

An accountant would no doubt give you advice, and that might help you negotiate a lower price, but who knows if that advice might be any good?


*As opposed to *intangible* assets, the most obvious being goodwill. The goodwill will simply be what you pay for the business minus the value of the tangible assets, cars being the most obvious.

**The phrase 'bottom line' literally refers to the net profit in a profit and loss account. In everyday speech it of course normally just means the end result of something, or similar.


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PostPosted: Tue Sep 24, 2019 7:38 pm 
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edders23 wrote:
I was offered approx 35% the value of the vehicles for 50 percent of the business with him remaining a silent partner and me running it but he wanted to get rid of half my existing drivers and chase school contracts in order to tempt a load of PH drivers away from existing Peterborough firms with the school contracts as the incentive

answer N.O.


Did he want blood as well? :shock:


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PostPosted: Tue Sep 24, 2019 8:15 pm 
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Location: A City near Birmingham
grandad wrote:
Sussex wrote:
grandad wrote:
Do you mean statutory sick pay? I don't think there is any requirement to pay more than this.

Must admit not a sick pay expert, but what is this then?

https://www.gov.uk/statutory-sick-pay

Yes, that is statutory sick pay. employees that qualify for this do get it from us, however up until a few years ago this was reclaimed from the government but it is not allowed now. As an employer though i do get an allowance of £2,000 I think, off of our employers national insurance to allow for such things. so if there are no claims for sick pay then we get £2,000 for nothing.



SSP paid to employees was deducted from the total of deductions from the rest of the employees, if there is insufficent to pay out then HMRC make up the difference but if there is an allowance, take it lol

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PostPosted: Wed Sep 25, 2019 7:33 am 
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wannabeeahack wrote:
grandad wrote:
Sussex wrote:
grandad wrote:
Do you mean statutory sick pay? I don't think there is any requirement to pay more than this.

Must admit not a sick pay expert, but what is this then?

https://www.gov.uk/statutory-sick-pay

Yes, that is statutory sick pay. employees that qualify for this do get it from us, however up until a few years ago this was reclaimed from the government but it is not allowed now. As an employer though i do get an allowance of £2,000 I think, off of our employers national insurance to allow for such things. so if there are no claims for sick pay then we get £2,000 for nothing.



SSP paid to employees was deducted from the total of deductions from the rest of the employees, if there is insufficent to pay out then HMRC make up the difference but if there is an allowance, take it lol

The allowance is automatic.

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PostPosted: Wed Sep 25, 2019 9:50 am 
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Quote:
The goodwill will simply be what you pay for the business

And the value of that will depend on, if indeed it does exist, whether that goodwill applies to the firm or to the drivers.

Nowadays I suggest it's more based on the extra goodwill the drivers add rather than the firm, and that then makes said goodwill quite liable to be lost in a short time if drivers leave or aren't happy with the new owner.

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PostPosted: Wed Sep 25, 2019 7:24 pm 
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Sussex wrote:
Quote:
The goodwill will simply be what you pay for the business

And the value of that will depend on, if indeed it does exist, whether that goodwill applies to the firm or to the drivers.

Nowadays I suggest it's more based on the extra goodwill the drivers add rather than the firm, and that then makes said goodwill quite liable to be lost in a short time if drivers leave or aren't happy with the new owner.


Indeed, but would depend on the particular firm. Uber's goodwill valuation, most obviously, might be more about the brand name rather than its relationship with drivers, because it's the big global brand that's enabled it to grow so rapidly, and obviously the public perception will be that it doesn't have a particularly good relationship with its drivers. Possibly no worse in that regard than any other despatch operation, but that's not usually played out in the public domain so much.

And, of course, with the trade in general and Uber in particular relying on a lot of short-term/here today-gone tomorrow drivers (with more always in the wings waiting to take their place) the loyalty of its workforce is perhaps less important than elsewhere in the economy.

Of course, apart from brand names, an important element of goodwill in the trade has traditionally been telephone numbers, but obviously their importance has dwindled over the years, to the extent that it's obviously completely irrelevant with regard to Uber.

(Note that my point about goodwill being simply about the value paid for a business minus the value of its (tangible net) assets is simply from a technical accounting exercise, and mainly because goodwill is difficult to measure accurately.

For example, if you pay £200k for a business, and the cars and computer equipment etc are worth £120k, then the goodwill will be worth £80k, but what precisely makes up the goodwill won't necessarily be know with any accuracy, but that might not be necessary.

Of course, you could buy and sell elements of goodwill separately, such as a brand or telephone number, and that would require a valuation of some kind, but obviously more difficult than valuing a car, say.)


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PostPosted: Wed Sep 25, 2019 8:06 pm 
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Location: Stamford Britains prettiest town till SKDC ruined it
to sell any business you have to justify every penny of the good will valuation

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PostPosted: Wed Sep 25, 2019 9:32 pm 
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edders23 wrote:
to sell any business you have to justify every penny of the good will valuation


easy for me.......i dont get any..lol


id be purely vehicles and contracts

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PostPosted: Thu Sep 26, 2019 3:43 am 
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Quote:
Of course, apart from brand names, an important element of goodwill in the trade has traditionally been telephone numbers, but obviously their importance has dwindled over the years, to the extent that it's obviously completely irrelevant with regard to Uber.

Good point.

I think a good number will never do you any harm, but not convinced it has anywhere near the benefits it had say five years ago.

I must have a zillion numbers in my phone, I doubt more than 5 or 6 are landline numbers. The only calls I get on my landline are from the same two people, both relatives. No one else ever rings me on my home phone, not even the call center wallahs.

So having a good app is now a must, even for the smaller firms. But that costs, and promoting that costs, as does updates etc.

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PostPosted: Fri Sep 27, 2019 5:51 am 
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Location: Clandestine, soon to be Russia.
One went for sale around where I used to live last year, 40+ cars all decent and serviced up to date, 30 of them were double crewed paying in a total of £185 each driver per week. There were 10 cars that were driven on full rent at a cost of £285 per week, there was school contracts worth £15K a month plus other local contracts with companies. The cash work like any other town is there. There are 8 owner drivers paying in £100 for the use of a PDA. The sale included a garage with ramps and a fully fitted office with computer dispatch system, price: £300K.


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